Honda Postponing Ontario EV Supply Chain Investment by Two Years

May 26, 2025

Honda is postponing its plan to invest in a comprehensive EV supply chain in Ontario.

The CBC reported that the investment is being push back by two years. “Due to the recent slowdown of the EV market, Honda Motor has announced an approximate two-year postponement of the comprehensive value chain investment project in Canada. The company will continue to evaluate the timing and project progression as market conditions change,” a company spokesperson told the CBC.

The federal government had plans to support the investment with $2.5 billion in tax credits and the Ontario government was set to provide $2.5 billion in incentives.

The initial plan for the large-scale project announced in April of last year consisted of four new manufacturing plants in Ontario.

Honda planned to build an innovative and world-class electric vehicle assembly plant – the first of its kind for Honda Motor Co. Ltd. – as well as a new stand-alone battery manufacturing plant at Honda’s facilities in Alliston, Ontario. To complete the supply chain, Honda also planned to build a cathode active material and precursor (CAM/pCAM) processing plant through a joint venture partnership with POSCO Future M Co., Ltd. and a separator plant through a joint venture partnership with Asahi Kasei Corporation.

The original Honda announcement targeted 2028 to be fully operational, the new assembly plant could produce up to 240,000 vehicles per year.

Honda’s investments in an electric vehicle assembly plant and a battery manufacturing plant in Alliston would mean over one thousand well-paying manufacturing jobs in Ontario, with the CAM/pCAM processing plant and separator plant would create thousands of additional direct and indirect jobs in Ontario and across Canada, including during the construction phase and across Ontario’s leading auto parts supplier and research and development ecosystems.

Honda’s official statement comments that, “we can confirm that our Canadian manufacturing facility in Alliston, Ontario, will operate at full capacity for the foreseeable future and no changes are being considered at this time. We constantly study options for future contingency planning and utilize short-term production shift strategies when required, to mitigate negative impacts on our business.”

“Canadian production will remain at full capacity thanks to domestic sales, which are up 9% in the first quarter of this year, led by the Canadian-built Honda Civic, Canada’s top-selling passenger car in 2024, and the Honda CR-V, the best-selling hybrid in Canada in 2024.”

Honda established Honda Canada in 1969 and started production in Alliston, Ontario, in 1986. These facilities – Honda’s only manufacturing facilities in Canada – currently include two auto plants and one engine plant. They have the capacity to produce more than 400,000 vehicles and 190,000 engines annually. The company employs over 4,200 people in Alliston.